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GOP, 2 Democrats stall financial regulation bill in Senate

Brown says he wants changes to aid Mass. firms

SEEKS AMENDMENTS Scott Brown said he would support the bill if it protects the more traditional practices of several Bay State companies. SEEKS AMENDMENTS
Scott Brown said he would support the bill if it protects the more traditional practices of several Bay State companies.
By Matt Viser
Globe Staff / May 20, 2010

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WASHINGTON — Senator Scott Brown joined Republicans and two Democrats yesterday in temporarily blocking a massive overhaul of the financial industry, saying that more changes need to be made to the proposal before a final vote should be called.

The Massachusetts Republican, who initially said he would vote with the Democrats, appeared to have drawn the ire of Senate majority leader Harry Reid.

“I don’t know a lot about everything, but I know how to count votes,’’ Reid, who lost on the procedural vote, said at a press conference. “Now, I’m not going to be giving any names and verses, but a senator broke his word with me.’’

That senator appeared to have been Brown.

“I actually told the leader yesterday that I would support’’ ending debate, Brown said in an interview about 30 minutes before Reid made his comments. “But that was when I thought — after having representation that the language was in there. And it turns out that it isn’t. I can’t do it. As much as I’d love to try and do it, I just can’t do it.’’

Reid had buttonholed Brown on the Senate floor after the Massachusetts Republican cast his vote. Brown huddled with his staff just outside the chamber and then went back in and met with Senator John F. Kerry, the Massachusetts Democrat, who favored moving to a final vote.

Yesterday’s vote is likely to be only a temporary setback, with negotiations continuing and another vote scheduled for this afternoon. Even some Republican opponents have predicted final passage, although yesterday’s vote put into question when that could come.

“I remain very optimistic,’’ Senator Christopher J. Dodd, the Connecticut Democrat and chairman of the Senate Banking Committee.

The vote to cut off debate was 57 to 42, three votes shy of the 60 needed to move to a final vote. The two senators from Maine, Susan M. Collins and Olympia J. Snowe — were the only Republican senators to vote in favor.

Reid switched his vote at the last minute, a procedural move that will allow him to recall the vote later. Senator Arlen Specter, who lost his primary election in Pennsylvania Tuesday night, was not in the chamber to vote. Two other Democrats, Senator Russell D. Feingold of Wisconsin and Senator Maria E. Cantwell of Washington, voted against the measure, an indication that there was discomfort among Democrats with the final proposal.

The financial overhaul legislation, which has been debated for several weeks, is designed to crack down on some of the risky practices that contributed to the financial downturn. It would create a consumer protection bureau that seeks to help people avoid trouble with mortgages and credit cards they cannot afford. The legislation would also establish a council that would be charged with monitoring the system for potential problems.

Several issues are still unresolved, and senators were scrambling yesterday to try to ensure that their amendments were voted on before debate ended.

Brown said he opposed the measure to end debate because he did not have assurances that several changes would be made, including one that would ensure that some of the new regulations would not apply to certain financial institutions.

Brown has tried to protect some of the insurance and mutual fund companies in Massachusetts from falling under the so-called Volcker rule, which could restrict the investment options of large institutions, including preventing them from owning private equity funds.

Brown argues that those restrictions should be designed to curtail the risky bets placed by big Wall Street firms, not the more traditional practices of the Massachusetts-based companies.

“The key thing that we’ve been working on for three weeks — that directly affects MassMutual, Liberty Mutual, Fidelity — it’s not in there,’’ Brown said, adding that he would support the bill if those changes are made.

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